Bally’s Corporation has released its financial results for the second quarter ending June 30, 2024. The company reported revenue of $621.7 million, a 2.5% increase year-over-year. Revenue from Casinos & Resorts rose to $343.1 million, a 3.0% increase. UK online revenues grew by 9%, although overall International Interactive revenue decreased by 7.4% to $229.4 million. North America Interactive revenue saw significant growth, rising 94.7% year-over-year to $49.2 million.
Bally’s announced $2.07 billion in transactions with GLPI, including $940 million for the Chicago project. The company also unveiled a new site plan for the permanent Bally’s Chicago Casino, featuring a 500-room hotel tower. Demolition and site preparation are currently underway on the 30-acre development site. Additionally, Bally’s has entered into a definitive agreement to merge with The Queen Casino & Entertainment Inc., an affiliate of Standard General L.P. Bally’s stockholders will receive $18.25 per share in cash or can choose to retain their investment.
For the quarter, Bally’s reported consolidated revenue of $621.7 million, up from $606.2 million in the same period last year. Casinos & Resorts revenue increased from $333.2 million to $343.1 million. International Interactive revenue fell from $247.8 million to $229.4 million, while North America Interactive revenue rose from $25.3 million to $49.2 million. The company posted a net loss of $60.2 million, compared to a net loss of $25.7 million in the previous year, and an Adjusted EBITDAR of $161.8 million.
Bally’s annual guidance for 2024 forecasts revenues between $2.5 billion and $2.7 billion, and adjusted EBITDAR between $655 million and $695 million. The company expects to be at the lower end of these ranges and is implementing tighter capital allocation strategies to maintain or improve its free cash flow position. Capital expenditures and software development costs for the core portfolio are expected to be reduced by approximately $50 million, now anticipated to be around $115 million for the year. This excludes developmental CapEx for projects such as the Tropicana and the permanent casino development in Chicago. The Tropicana demolition and site preparation will be funded by GLPI and added to its rent base for the land lease. GLPI will also fund some construction costs for the Chicago project, while Bally’s will handle demolition, site preparation, and soft costs.
Bally’s guidance is based on current plans and expectations and includes several assumptions. The guidance is subject to known and unknown risks and uncertainties, as detailed under “Cautionary Note Regarding Forward Looking Statements” in the full report.
Robeson Reeves, Bally’s Chief Executive Officer, commented, “Bally’s delivered solid 2024 second quarter operating results during what remains an active period for our Company. Consolidated revenue grew 2.5% to $621.7 million, driven by 3.0% growth in Casinos & Resorts (“C&R”) revenue, 94.7% growth in North America Interactive revenue, and 9% UK revenue growth, a record performance. This was offset by declines in Asia and other markets, resulting in a 7.4% overall decline in International Interactive revenue. Subsequent to the second quarter end, we entered into a binding term sheet for a $940 million strategic construction and financing arrangement with Gaming & Leisure Properties (“GLPI”) which includes funding to complete the construction of our flagship permanent casino in the heart of downtown Chicago. The arrangement also includes sale-leaseback transactions for our Kansas City and Shreveport properties for $395 million and reiterates our intentions for a saleleaseback of our Lincoln property for $735 million.
“Last week, we entered into a definitive merger agreement with The Queen Casino & Entertainment Inc. (“QC&E”), a regional casino operator with four casinos across three states, which is majority-owned by funds managed by Standard General L.P., also Bally’s largest shareholder. As part of the merger transaction, Bally’s stockholders will receive cash consideration of $18.25 per Bally’s share with and option to elect to maintain their equity investment in Bally’s. The addition of four properties to our existing domestic property portfolio not only expands our platform and databases but will further diversify the markets in which we operate. The combination of QC&E’s development pipeline also to our own growth pipeline provides the Company with a clear path toward additional revenue, cash flow growth and value accretion. We expect to provide more details around this transformative transaction in a forthcoming proxy statement.
“Casinos & Resorts revenue of $343.1 million benefited from the ongoing ramp of operations at our Chicago Temporary Casino and stability across most of our portfolio, offset by the closure of Tropicana and in part by property-specific headwinds in certain markets. The Chicago Temporary Casino, having now welcomed more than one million total visitors, continues to gain traction with players and our local database is growing. In Rhode Island, local bridge construction on Interstate 195 has led to lane closures which disrupt traffic during peak periods, impacting visitation to our Lincoln property. In addition, we experienced an increase in promotional activity from certain Massachusetts properties which we are managing through. Finally, though we continue to invest in our Atlantic City property, turnover in our relationship marketing team impacted second quarter results for this market. Reflecting the impact on operations in these markets, second-quarter segment adjusted EBITDAR declined 10% year-over-year.
“In the UK, we continued to see healthy revenue growth of 9% (8% in constant currency) while overall International Interactive revenues declined by 7.4% year-over-year to $229.4 million due to lower revenues from our non-UK operations. Despite the overall revenue decline in International Interactive, adjusted EBITDAR margins improved 130 basis points year-over-year, leading to overall International Interactive adjusted EBITDAR of $81.3 million, down 3.9% year-over-year. The strength of our UK market reflects continuing iGaming share gains and the initial results from accelerating the soft launch of our online sports betting offering. Outside the UK, our business in Asia was challenged in the quarter as we continue to work through several logistical and operational hurdles which directly impacted players. We believe the Asian Interactive market remains an attractive opportunity and we will continue to work to manage and grow our position in this important region.
“Our North America Interactive operations generated second quarter revenues of $49.2 million, up 94.7% year over-year, and an Adjusted EBITDAR loss of $6.8 million. We outperformed our internal expectations for this segment in the second quarter as we benefited from strong performance from our iGaming operations in Rhode Island. Further, we continue to generate excellent results in our New Jersey and Pennsylvania iGaming markets as well as from our Bally Bet OSB operations, driven in part by the ongoing integration of the Kambi and White Hat technology platforms which have garnered positive player feedback and enhanced our ability to deliver a leading product offering.”
George Papanier, Bally’s President, added, “While certain market-specific events impacted performance, the rest of the portfolio grew 19% year-over-year, and excluding Chicago, grew 3%, demonstrating the resilience of the portfolio. Unique growth initiatives such as our Chicago development add to the overall attractiveness of Bally’s. Progress at our Chicago project continues, with our recent announcement of the funding agreement with GLPI and the redesign of the all-new permanent Bally’s Chicago Casino setting the stage for the creation of a flagship casino resort destination in the heart of downtown Chicago. We have now taken control of the former Chicago Tribune site and are in the process of beginning the demolition and site prep work we need to complete before construction can begin. At the same time, we are working through an approval process with the City given the recent change to the site plan which now includes the construction of a 500-room hotel tower as part of a single-phase project. We also continue to ramp up operations at the Chicago Temporary Casino with improving utilization and a growing database of players along with ongoing efforts to round out the amenities available to our players. Given the favourable adult population and demographic comparison to other large metropolitan casino resort markets, we are in a great position in Chicago to achieve attractive long-term returns on this project and look forward to working closely with the community to bring our vision to life. Outside of Chicago, we continue to manage our business for long-term growth and remain optimistic regarding our C&R portfolio and its future prospects.”
Marcus Glover, Bally’s Chief Financial Officer, concluded, “The diversity of our asset portfolio was again on display in the second quarter of 2024 as we generated healthy financial performance even in the face of some property-specific headwinds. We remain focused on optimizing our cost structure and enhancing operating efficiency as we continue to build our businesses and operate them cohesively. These efforts have delivered initial successes, and they remain a priority as we move through the balance of the year.”
